Commodity exchanges must constitute Investor Protection and Service Fund. Capital market regulator SEBI has issued guidelines in this regard, that exchanges constituting Investor Service Fund will have to provide minimum services to various Investor Service Centers.
There should be at least five trustees in the Investor Protection Fund of the exchanges. Among these, three trustees must be public interest directors and one should be representative of the SEBI’s Recognized Investors Association. The fifth member will be in the form of a compliance officer on behalf of the exchange. All the types of penalties should be deposited in this fund, except the penalties on the settlement penalty and delivery defaulters. The amount deposited in the form of a penalty should be used through this fund.
SEBI has approved the options trading of the commodity.
Market regulator SEBI has approved the options trading to expand the commodity ie commodity futures trading. Although he has initially allowed commodity exchanges to launch only one commodity option contracts. Exchanges have also been asked to take appropriate steps for risk management. SEBI has said that the exchange will be able to launch the option of future commodity futures contracts of one of the top five commodities in turnover for the last 12 months while making the provision of stringent eligibility conditions.